An article in today’s Pittsburgh Post-Gazette reported that Alcoa had a big quarterly profit surge. I found the CEO’s quote a little ambiguous as to the reason.

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He said: “We battled substantially higher material input and energy costs, and currency impacts while simultaneously continuing to execute on the largest capital investment program in our history.”

So, with sales declining and profits increasing, costs obviously went down. But because three of their business units reported lower earnings, the fact that “Alcoa blamed [those units’] slide on higher freight and energy costs,” and the CEO saying they “battled substantially higher” procurement-related costs, it is unclear whether reductions in other costs more than offset higher procurement-related costs.

I searched the Internet for their 4Q filing to see if the cost of goods sold decreased, but didn’t find one yet.

So did they “successfully” battle those costs or not?

I’m confused.

To Your Career,
Charles Dominick, SPSM
President and Chief Procurement Officer
Next Level Purchasing, Inc.
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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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